At the time of writing this article, I am living in Singapore. I have spent nearly half a year in this city of Singapore. Although half a year is not long for many people, for myself, it is the longest stay in a different place in the past ten years.
After a long battle, the new crown epidemic, which may be the first Boss-level epidemic faced by mankind since 1945, seems to have been brought under control, and the city has begun to become normal. Although, for the 7.8 billion people of the entire world, some regions are still facing severe conditions, but now a glimmer of light can be seen in the dark. The rapid development and promotion of the new crown vaccine will help mankind complete this difficult challenge.
Due to various events, 2020 can be called a magical year. As “Away from the keyboard (AFK)” makes people’s lives more rigid and full of challenges, the development of the Internet has also begun to become extraordinary, with mixed consequences.
Politics around the world have also moved in a strange direction. I am constantly worried about the prospects of many political factions. Some politicians have not hesitated to abandon the basic principles they should abide by for their own benefit. However, at the same time, some unusual dark corners are shining with hope, transportation, medicine, AI, and of course the blockchain and encryption fields. The birth of these new technologies may open a new chapter in human development.
Therefore, 2020 is an excellent time to think about key questions: how should we re-evaluate how the world works? Which ways of seeing, understanding, and deducing the world’s operations will be more useful in the next few decades, and which ways will not be so valuable? Which methods we have not seen before, but have always been valuable?
In this article, I will give some of my own answers, although my ideas may not be comprehensive, but I will dig deeper into some interesting content. Moreover, among these thoughts, which are the knowledge of changes in reality and which are just my own long-term observations. In fact, it is difficult to draw a clear dividing line between the two. In most cases, the two are combined. I think the answers to these questions have profound significance for both the encryption field and the broader field.
The changing role of economics
All along, economics has focused on “commodities” in physical form: food, small manufacturing parts, houses for sale, etc. Physical assets have some special properties: they can be transferred, destroyed, bought and sold, but they cannot be copied. It is unrealistic to allow one person to use an item that another person is using. Many items are only valuable when they are directly consumed.
The resources required to make ten copies of a physical object can be seen as ten times as much as making one copy (almost ten times, and the larger the scale, the closer it is). But on the Internet, the applicable rules are quite different. Copying once on the Internet is very simple. I can copy an article or a piece of code very conveniently, although writing an article or a piece of code takes considerable effort. But when an article or a piece of code is completed, countless people can download and use them. They are not “consumables”. Although they may be replaced by better products later, they can be for people forever before being replaced. Provide value.
In the Internet, “public goods” occupy a major position. Of course, there are also private commodities on the Internet, especially commodities that exist in the form of scarce personal attention and events and virtual assets. But in general, most of the goods on the Internet are one-to-many, not one-to-one. What makes the situation more complicated is that the so-called “many” rarely can be easily mapped to our traditional one-to-many interactive structure, such as companies, cities, or countries; on the contrary, these public goods are usually widely dispersed throughout the world Is used publicly among the population.
Many online platforms that serve a wide range of people need to be governed to determine their functions, content review policies, or other measures that are important to their user communities. But on these platforms, the user community rarely maps clearly to anything other than themselves. When Twitter has often become a platform for public debates between US politicians and representatives of geopolitical opponents, how can the US government govern Twitter be fair? But obviously, governance challenges still exist, so we need more creative solutions.
This is not just the interest of “pure” online services. Although commodities in the physical world, such as food, housing, medical care, and transportation, are still as important as ever, the improvement of these commodities is even more dependent on technology than ever before, and technological progress is indeed achieved through the Internet.
In the Ethereum ecosystem, examples of important public products funded by the recent four rounds of Gitcoin financing. The open source software ecosystem, including blockchain, relies heavily on public products.
But at the same time, economics itself seems to be a less powerful tool for dealing with these problems. Of all the challenges in 2020, how many can be understood by observing the supply and demand curve?
One way is to understand what happened by observing the relationship between economics and politics. In the 19th century, the two were often regarded as linked, and the discipline was called “Political Economics.” In the 20th century, the two were separated. But in the 21st century, the boundary between “private” and “public” has become blurred again. The government behaves more like market actors, and the company behaves more like the government.
We see that this kind of convergence is also beginning to happen in the field of encryption, and researchers are increasingly turning their attention to governance challenges. Five years ago, the main economic issues being explored in the encryption field were related to consensus theory. This is an operational economic problem with a clear goal, so we will get high-quality clear results in some situations, such as selfish mining papers. Some subjective opinions (such as quantitative decentralization) exist, but they are easily encapsulated and handled separately from the formal mathematics of mechanism design.
But in the past few years, we have seen more and more complex financial protocols and DAOs born on the blockchain, and we have also seen the governance challenges within the blockchain. For example: Should BCH redistribute 12.5% of its block reward to the developer team? If so, who decides who this developer team is? Should Zcash extend its 20% developer reward for another four years? These problems can of course be analyzed in economics to a certain extent, but the analysis will inevitably be in a coordinated state for a long time, and constantly adjusted. The concepts of “Schelling points” and “legitimacy” are used It is much more difficult to express in numbers. Therefore, a hybrid discipline is needed that combines formal mathematical reasoning with the soft style of humanistic reasoning.
We want to digitalize the country, but what we get is digitalism
Since around 2014, I started to pay attention to one of the most fascinating things in the encryption field quite early: how quickly it began to copy the political model of the entire world. What I mean is not just in some broad abstract sense, that is, “people are forming tribes and attacking each other.” I mean similarities. The depth and specificity of these similarities is surprising.
Let me tell a story first. From 2009 to around 2013, the Bitcoin world was a relatively innocent and happy place. The community is developing rapidly and prices are rising. Although there are differences in block size or long-term direction, they are mainly academic. Compared with the common goal of helping Bitcoin grow and prosper, these differences are insignificant and no one will Has been holding on.
But in 2014, splits began to appear. The transaction volume on the Bitcoin blockchain has reached 250 kilobytes per block and continues to rise. For the first time, people are concerned that the blockchain usage limit may actually reach the 1MB limit before the increase. The non-bitcoin blockchain has always been a small supporting role until then, but since then it has suddenly become an important part of this field, and Ethereum can be said to be the leader in these blockchains.
It is precisely because of these events that the differences that had been hidden under the calm surface suddenly exploded. The idea of ”Bitcoin Supremacy” is that the goal of the crypto field should not be a diversified cryptocurrency ecosystem, but should only include Bitcoin. This concept developed from a niche curiosity to a compelling and angry movement. Dominic Williams and I quickly understood its essence and gave it the name “Bitcoin Supremacy.” It advocates that no matter how high the transaction fee is, the block size should be increased very slowly, and the small block concept of never increasing the block size has begun to take root.
Disagreements within Bitcoin will soon turn into a full-scale civil war. Theymos is one of the main operators of the topic section/r/bitcoin subreddit on the Reddit forum. He is also the operator of several other key public Bitcoin discussion spaces. He took advantage of this position to adopt an extreme censorship system. Views (which tend to be small) are imposed on the community.
In response, big block supporters moved to a new topic forum /r/btc. Some people bravely tried to use diplomatic conferences to resolve tensions, including a famous diplomatic conference held in Hong Kong, and reached a seeming consensus, but a year later, the small block faction will eventually abandon the agreement. By 2017, the big block faction had firmly embarked on the path of failure. In August of the same year, they forked and realized their vision on the continuation of their respective independent Bitcoin blockchains. They called it “Bitcoin Currency Cash” (Token BCH). (Rhythmic Note: For the history of Bitcoin’s first hard fork, please refer to the related article “The History of Bitcoin Fork”)
The division of the community is chaotic, as can be seen from the division of communication channels after the fork. /r/bitcoin is controlled by supporters of Bitcoin (BTC). /r/btc is controlled by supporters of Bitcoin Cash (BCH). Bitcoin.org is controlled by supporters of Bitcoin (BTC). Bitcoin.com is controlled by supporters of Bitcoin Cash (BCH). Both parties claim to be the real Bitcoin. The result looks very similar to those frequent civil wars that split a country into two halves. Both sides call themselves almost identical names. The only difference is that each party’s name is “democracy,” “people,” and “republic.” Different combinations of nouns. Neither party has the ability to eliminate the other, and of course there is no higher authority to decide this dispute.
At about the same time, Ethereum also had a chaotic split, appearing in the form of a DAO fork, which is a controversial solution to the theft of more than 50 million US dollars in the first major smart contract application on Ethereum . Just like in the Bitcoin incident, first there were internal disputes, although it lasted only four weeks, then the blockchain forked, and then two chains appeared, Ethereum (ETH) and Ethereum Classic (ETC) . The naming dispute is as interesting as Bitcoin: the Ethereum Foundation holds the ethereumproject account on Twitter, but the supporters of Ethereum Classic hold ethereumproject on Github.
Some people on Ethereum will think that there are very few “real” supporters of Ethereum Classic. The whole incident is mainly a social attack by Bitcoin supporters: either they support the version of Ethereum that matches their values, or they cause chaos and directly destroy the Ethereum. Fang. I myself believed these claims at first, but over time, I gradually realized that these claims were overblown. Although some Bitcoin supporters have indeed tried to shape the results according to their own imagination, to a large extent, as in many conflicts, the “outsider interference” card is the support of many Ethereum (some kind of To a certain extent, including myself) subconsciously used to shield our own psychological defenses, because many people in our own community do have different values. Fortunately, the relationship between these two projects has since improved, thanks in part to Virgil Griffith’s excellent communication skills, the developers of Ethereum Classic even agreed to move to another Github page.
Infighting, alliances, groups, and alliances with infighting participants, all of which you can see in the field of encryption. Fortunately, these conflicts are virtual and online, without the extremely harmful personal consequences that happen in real life.
So, what can we learn from these things?
An important revelation is: if phenomena like this occur in very different situations such as conflicts between countries, conflicts between religions, and relationships within and between pure digital cryptocurrencies, then what we see may be Some things that are indelible in human nature are more difficult to solve than by changing what kind of group we organize. Therefore, we should expect that this situation will continue to happen on many occasions in the next few decades. Perhaps it is more difficult than we think to distinguish the possible benefits and disadvantages of this situation: the energies that motivate us to fight also motivate us to contribute.
What is it that inspires us?
An important knowledge background in the 2000s was the recognition of the importance of non-monetary motives. People’s motivation is not only to earn as much money as possible at work, but also to obtain enjoyment from money in family life; even at work, our motivation comes from social status, honor, altruism, reciprocity, and sense of contribution , Different social concepts about what is good and valuable, etc.
These differences are very meaningful and measurable. For example, take a look at this Swiss study on unethical work compensation: If a job is deemed unethical, how much should an employer pay to persuade someone to do the job?
We can see that this effect is huge: if a job is widely regarded as unethical, you need to pay employees almost twice the salary before they are willing to do the job. According to personal experience, I even think that twice the salary is an underestimated situation: in many cases, first-class workers are not willing to work for a company that they think is bad for the world at almost any cost.
“Jobs” that are difficult to quantify (such as word-of-mouth marketing) have similar effects: if people think a project is good, they will do it for free, if they think it’s bad, they won’t do it at all. This is also very likely to be the reason why those blockchain projects that raise a lot of funds but unscrupulously, or even just the “VC chain” controlled by enterprises for profit, often fail: even if they hold 1 billion US dollars, they cannot Compete with a project with a soul.
In other words, it is possible to over-idealize this fact in several ways.
First of all, although the subsidies for this kind of decentralized, non-market, non-governmental, and socially well-recognized projects are huge, and may reach tens of trillions of dollars globally each year, its impact is not unlimited . If a developer is faced with two choices, one is to earn $30,000 per year through “pure ideology”, and the other is to obtain $30 million in IC0 by inserting an unnecessary token into the project, they will Choose the latter.
Second, the motives of idealistic motives are uneven. Rick Falkvinge’s Swarmwise emphasized the possibility of decentralized non-market organizations by pointing to political activism as a key example. And this is the fact that political activism does not need to be paid. But longer, harder tasks, even simple things like doing a good job of the user interface, are not so easy to be internally motivated. Therefore, if you rely too much on intrinsic motivation, some tasks will be over-completed, while other tasks will not be completed well or even completely ignored.
Third, people’s perception of the intrinsic attractiveness of work may change and may even be manipulated.
For me, an important conclusion drawn from this is the importance of culture (and the extremely important word “narrative”, which has been unfortunately destroyed by influential people in the crypto field). If a project has a high moral status, it is equivalent to the project has twice or more funding, then culture and narrative are extremely powerful forces, commanding a value equivalent to tens of trillions of dollars. And this does not even cover the role of this concept in shaping our perception of legitimacy and coordination.
Therefore, anything that affects culture will have a huge impact on the world and people’s economic interests. We will see more and more various actors make more and more complex efforts systematically and consciously. This is the dark conclusion about the importance of non-monetary social motivations: they create battlefields for the permanent and final frontiers of war. Fortunately, this war is usually not fatal, but unfortunately it is impossible to make a peace treaty for it. Because it is necessary to decide what is considered a war, and how subjective a culture war is.
The big XXX form has always existed
One of the most important debates in the 20th century is the debate between “big government” and “big business”-the two are arranged in different ways: Big Brothers, big banks, and tech giants, they also appear on the stage from time to time. In this environment, great ideology is usually defined as trying to abolish all kinds of big XXX that they don’t like: such as company-centered doctrine, the influence of anarchic capitalism on the government, etc.
Looking back on 2020, people may ask: Which great ideologies have succeeded and which have failed?
Let’s take a look at a concrete example: the 1996 Declaration of Independence in Cyberspace:
“Governments of the industrial world, you tiresome giants made of flesh and steel, I come from the new home of thought-cyberspace. On behalf of the future, I ask you from the past to stop pestering us. We do not welcome you. You have no sovereignty where we gather.”
And a crypto-anarchist manifesto with a similar spirit:
“Computer technology is about to provide individuals and groups with the ability to communicate and interact in a completely anonymous manner. Two people can exchange information, conduct business negotiations and sign electronic contracts without knowing the real name or legal identity of the other person. Through extensive rerouting of encrypted packets and anti-tamper boxes, the interactions on the network will be untraceable. These encrypted packets and anti-tamper boxes implement the encryption protocol with almost perfect guarantee to prevent any tampering.”
Reputation will be crucial, even more important in trading than today’s credit rating. These developments will completely change the nature of government regulation, taxation and control of economic interaction, the ability to keep information confidential, and even the nature of trust and reputation.
How are these predictions going? The answer is interesting: I want to say that they succeeded in one aspect, but failed in another.
So what is success? We conduct various interactions through the network, we have strong cryptography, and it is difficult for even state actors to break this. We even have a strong cryptocurrency, and its smart contract function was hardly expected by thinkers in the 1990s. We are increasingly developing an anonymous reputation system through zero-knowledge proof. What failed? The government has not disappeared.
So what was completely unexpected?
Perhaps the most interesting plot twist is that these two forces are actually mutual in most cases. In general, they do not act like mortal enemies, and even within the government, many people are seriously looking for ways to trust the blockchain and cryptocurrencies and new forms of cryptography.
What we see in 2020 is: big governments are as strong as ever, but big companies are as strong as ever. The “large protesters” are as strong as ever, as are the large technology companies, and perhaps soon large cryptography will be the same. This is a densely populated jungle, and there is an uneasy peace among many complex characters.
If you define success as the disappearance of one of the powerful actors, or even the disappearance of the kind of actors you don’t like, you are likely to leave the 21st century disappointed. But if you define success more in terms of what happened than not what happened, and you can accept imperfect results, then you have enough room for everyone to feel happy.
Thrive in dense jungle
So we have this world:
-One-to-one interaction is not so important, one-to-many and many-to-many interactions are more important.
-The environment is much more chaotic and it is difficult to model with clean and simple equations. Many-to-many interactions follow strange rules, and we still don’t understand these rules well.
-The environment is dense, and different types of powerful characters are forced to live closely together.
To some extent, this world is not very convenient for people like me. I have studied economics since I was a child. It focused on analyzing simple physical objects and buying and selling. Now, I have to fight against a world in which, although it is not completely irrelevant, it is obviously not. It used to be so important. In other words, the transition is always challenging.
In fact, for those who think that transformation is not challenging, transformation is particularly challenging, because they believe that transformation just confirms what they have been thinking. If you are still following the script created in 2009 (at the time, the financial crisis was the most recent key event in people’s minds), then it is almost certain that you have missed some important things that happened in the past 10 years. An ideology that has ended is an ideology of death.
In this world, blockchain and cryptocurrency will play an important role. The reasons are more complicated than many people think, and it has a lot to do with cultural power and any financial power (cryptocurrency is the most underestimated big cow One of the fields, I have always believed that the value of gold is not high, and the younger generation is aware of this, then the 9 trillion dollars in their hands must have a new place).
Similarly, complex forces will make blockchain and cryptocurrency useful. It is easy to say that any application can be completed more efficiently using centralized services. But in practice, the problem of social coordination is very real. People are unwilling to join a system that is even considered non-neutral, or a manifestation of continuous dependence on a third party. This is also a real problem. Therefore, the various centralized and even alliance-based methods that claim to replace the blockchain have not made any progress, and the “stupid and inefficient” blockchain-based public solutions are just moving forward quietly, and Get actual adoption.
Finally, this is a very multi-disciplinary world, it is difficult to break it down into different layers and analyze each layer separately. You may need to switch from one analytical style to another at a certain level. Things always happen for strange and incredible reasons, and there are always surprises.
